Shoppers buy before sales tax increases

March 30, 2009 12:00:00 AM PDT
The cost of all items purchased in California is going up this week. The state sales tax will increase by one-percent on Wednesday.

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The rates in the nine Bay Area counties will range from 8.375-percent in Solano County to 9.75 in Alameda County, and some additional taxes in other cities will make it even higher. Now, there is a big-ticket-item buying spree that's underway.

For now, business is brisk at the Marin Acura in Corte Madera. With the state sales tax going up one-percent on April 1, 2009, customers are saying, "Why wait?"

"If you're on the edge and you're really thinking about doing it this week, why would you wait a couple days. That doesn't make a whole lot of sense to me," said Jeff Gates, a car buyer.

For Gates, buying an Acura TSX now as opposed to Wednesday means a savings of about $300.

The hike in the sales tax is just one of three tax increases in the state. Californians will also pay more in personal income taxes and the vehicle license fee. It's the state's largest tax increase in 18 years and it's all part of the deal made in Sacramento to help balance the budget.

"I think it's okay. At this point in time, we've got to cover these things and with revenues down, I think that it's appropriate," said Allen Lavee, a San Rafael resident.

But people in Sonoma and Marin counties, face an even higher sales tax -- not one-percent, but 1.25-percent. Voters approved a quarter cent sales tax in November to fund a commuter rail system known as SMART.

"Highway 101 is the only north-south route in Marin and Sonoma county, so with the train project in place, residents will have another way to get around to their jobs or schools," said Lillian Hames, the SMART general manager.

People ABC7 talked to say, unfortunately, all of this comes when household budgets are extremely tight.

"I don't think it's necessarily going to stimulate my desire to go out and buy more stuff," said Nancy Holland, a Sausalito resident.

Which is why businesses like Marin Acura are trying to motivate people to buy now.

"You don't have to come to an Acura. Go to any dealership and try to take advantage of the tax savings," said Jean Pierre Kabbara, the Marin Acura finance director.

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